What we’re reading (6/7)
“From The Big Short To The Big Scam” (Paul Krugman, New York Times). “It sounds extreme and implausible to suggest that an asset class that has become so large, whose promoters have acquired so much political influence, could lack any real value — that it is a house built not on sand, but on nothing at all. But I remember the housing bubble and the subprime crisis. And if you ask me, it looks as if we’ve gone from the Big Short to the Big Scam.”
“Fed GDP Tracker Shows The Economy Could Be On The Brink Of A Recession” (CNBC). “A widely followed Federal Reserve gauge is indicating that the U.S. economy could be headed for a second consecutive quarter of negative growth, meeting a rule-of-thumb dSefinition for a recession. In an update posted Tuesday, the Atlanta Fed’s GDPNow tracker is now pointing to an annualized gain of just 0.9% for the second quarter.”
“Retail Investors Aren’t Trading Like They Expect A Recession Anytime Soon, Bank Of America Says” (Insider). “The bank looked at the fund flows of its client's trading activity, and found that retail investors are consistently buying riskier stocks over defensive stocks despite the economic warnings from major bank CEOs like Jamie Dimon of JPMorgan and Charlie Scharf of Wells Fargo.”
“Multistrats Weather The Storm” (Institutional Investor). “This has already been disastrous year for many growth-oriented long-short managers. But through May, several strategies have avoided the carnage and are solidly in the black for the year. These include multistrategy funds, which are mostly up in the low- to mid-single-digit range.”
“SEC’s Trading Shake-Up Expected To Face Heavy Opposition” (Wall Street Journal). “The agency is preparing to propose major changes to the stock market’s plumbing as soon as this fall, The Wall Street Journal reported Monday. SEC Chairman Gary Gensler is expected to outline some of the SEC’s plans Wednesday in a speech. The changes grew out of the frenzied trading in GameStop Corp. and other meme stocks in early 2021, which resulted in heavy scrutiny of the handling of individual investors’ trades.”
